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The
Real Reason
They Changed the Dow (DJIA)
November 1999
Was it sour
grapes or s-l-o-w reflexes?! We noted in our October, 1999 HSL that
the DJIA had finally reached our 11,364 target, predicted 9 months
earlier on page 2 of our January issue (actual DJIA intraday high: 11,365.93
on August 24):
"US stocks? DJIA
(Dow Jones Industrial Average) completed a large, bullish Continuation
Head & Shoulders pattern on January 6 [see dashed lines on chart].
Target: 11,364. That's almost a 24% rally from year-end '98."
In the very
next paragraph we also said:
While the DJIA is still
the most widely watched market average, in '99 it'll be more important
to also follow the S&P 500 Index. Why? Technology stocks, as
a large group, are a big part of market leadership & will probably
remain so for some time. Tech stocks are not adequately represented
in the DJIA & til that changes, the S&P 500 will be at least
as important as the DJIA."
No sooner did
the ink dry on our October issue, the powers-that-be tried to again
"juice" the DJIA by replacing so-called "Old Economy" laggards
with "New Economy" turks.
Were they that
upset with the preciseness of our prediction OR are they just 9 months
behind in their reading & finally got around to our January issue?
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Regardless,
& all kidding aside, we note the November 1 DJIA changes
(Additions: Home Depot, Intel, Microsoft, & SBC Communications;
Deletions: Chevron, Goodyear Tire & Rubber, Sears & Union Carbide).
Will make
the DJIA a more active "player," & we'll be utilizing the hopped-up
DJIA for our subscriber's benefit via Diamonds (AMEX: DIA) & other
strategies.
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